Download January-March 2002

This document is a translation of the original, published in Swedish. In cases of any discrepancies between
the Swedish and English versions, or in any other context, the Swedish original shall have precedence.
FINANCIAL STATEMENT
January-March 2002
_________________________________________________________________________________
Corporate Identity No. 556025-5001
www.billerud.com
Quarter
Full
year
2002
I
2001
IV
2001
I
2001
1 756
1 735
1 840
6 910
268
265
469
1 299
15
15
25
19
Profit after financial items, MSEK
247
230
441
1 181
Earnings per share, SEK
2.82
2.98
5.04
13.81
Net turnover, MSEK
Operating profit, MSEK
Operating margin, %







Market demand was stable during the first quarter, although prices fell slightly in
some segments compared with the final quarter of 2001.
The market situation is relatively good and order levels have improved in recent
months.
Production efficiency and delivery capability were high at Billerud’s mills. No
maintenance stoppages were carried out during the quarter.
Deliveries reached 333 000 tonnes, up 3% on the final quarter of 2001 and up
10% on the first quarter of 2001.
The operating profit was MSEK 268, up 1% on the final quarter of 2001 but
down 43% on the first quarter of 2001.
The profit after financial items was MSEK 247. Adjusted for one-off items, the
result was down MSEK 12 on the previous quarter.
The return on capital employed during the past 12-month period was 23%.
A telephone conference in English will be held at 6 p.m. CET, call +44 20 8781 0598
See a film presentation of the conference on www.billerud.com
from 9 p.m. CET today.
_______________________________________________________________
If you have any questions concerning this report, please contact
Bert Östlund, President & CEO, +46 8 553 335 00 or +46 70 518 2757
or Nils Lindholm, CFO, +46 8 553 335 00 or +46 70 217 5225
E-mail: [email protected]
2
Billerud Group
Market
During the first quarter of the year demand for Billerud’s products has generally been stable.
The total volume of deliveries reached 333 000 tonnes, which was 3% higher than the final
quarter of 2001 and the best quarterly result in recent years. A prerequisite for increased
deliveries has been high production efficiency and delivery capability at Billerud’s mills. The
streamlining project is proceeding according to plan. No maintenance stoppages were
carried out during the period.
Small price reductions were made for Billerud’s packaging paper during the quarter.
Deliveries amounted to 251 000 tonnes, an increase of 6% compared with the final quarter
of 2001.
With stocks high, market prices for long-fibre market pulp fell during the quarter from around
USD 465 per tonne at the start of January to around USD 435 per tonne at the start of April.
However, increases in pulp prices have been announced in recent weeks. Billerud’s
deliveries of market pulp amounted to 82 000 tonnes during the quarter, 6% down on the
previous quarter, partly due to higher internal consumption.
Sales and results
First quarter
Net turnover for the period amounted to MSEK 1 756, a 1% increase compared with final
quarter of 2001 and a 5% fall compared with the first quarter of 2001.
Operating profit amounted to MSEK 268, an increase compared with the previous quarter of
MSEK 3 or 1%, and a decrease compared with the same period last year of MSEK 201 or
43%.
The change in operating profit compared with the final quarter of 2001 was partly due to the
fact that one-off costs of MSEK 15 affected the final quarter results and partly due to lower
sales prices being balanced by higher delivery volumes and slightly lower costs, mainly for
energy and chemicals.
The deterioration in earnings compared with the same period last year is explained by lower
prices, expressed in EUR and USD, primarily for market pulp, which accounts for MSEK 126
of the decline. The effect on earnings of price reductions was balanced to a certain extent by
the weakened Swedish krona and by increased deliveries.
Comments on the earnings trend for each product area are provided on page 4.
Net financial items amounted to MSEK -21 and mainly comprised interest costs for Billerud’s
syndicated bank loan. The profit after financial items amounted to MSEK 247. Adjusted for
one-off items, the result was down MSEK 12 on the previous quarter.
3
Foreign exchange exposure
Because its manufacturing units are located in Sweden and 86% of production is exported,
Billerud is exposed to changes in foreign exchange rates, especially the fluctuations in the
rate of SEK in relation to EUR and USD. In order to handle this, Billerud hedges around
100% of estimated net flows over 15 months in EUR, USD and GBP at the following rates.
During the first quarter of 2002 net flows have been hedged at the following rates: SEK/EUR
9.49, SEK/USD 10.47 and SEK/GBP 15.04. Currency hedging boosted profits by around
MSEK 30.
Hedged exchange rates against SEK for the next 15 months (5 quarters)
Currency
Q 2 2002
Q 3 2002
Q 4 2002
Q 1 2003
Q 2 2003
SEK/EUR
9.53
9.54
9.42
9.49
9.21
SEK/USD
10.62
10.64
10.68
10.66
10.61
SEK/GBP
15.07
15.41
15.09
15.11
14.82
Average
9.43
10.64
15.10
Investment and capital employed
Gross investments amounted to MSEK 60, while depreciation during the same period
amounted to MSEK 91. Investments relate to small maintenance projects and the projects at
Gruvön and Karlsborg announced in the final quarter of 2001.
Billerud’s capital employed amounted to MSEK 4 932 as of 31 March 2002, compared with
MSEK 4 822 on 31 December 2001. Increased capital employed was explained by a lower
tax liability, otherwise only very small changes were recorded during the quarter.
Cash flow and financial position
Cash flow from operating activities amounted to MSEK 126 during the first quarter. Cash
flow was affected by supplementary income tax payments of MSEK 176 for the 2001 tax
year. Capex during the quarter produced amounted to MSEK 60. The operating cash flow
reached MSEK 66, compared with MSEK 111 for the final quarter of 2001 and MSEK 202 for
the first quarter of 2001. The operating cash flow corresponds to the change in Billerud’s net
debt. The operating cash flow deteriorated (compared with the first quarter of 2001) because
of the lower operating surplus which was only partly compensated for by a lower investment
level. After amortisation of interest-bearing liabilities (MSEK 1) liquid funds increased by
MSEK 65.
The interest-bearing net debt amounted to MSEK 1 665 on 31 March 2002, compared with
MSEK 1 731 on 31 December 2001 and MSEK 2 402 on 31 March 2001. The Group’s net
debt/equity ratio at the end of the period was 0.51 compared with 0.56 on 31 December
2001 and 0.95 on 31 March 2001. The positive operating cash flow for the period April 2001March 2002 explains the reduced net debt/equity ratio.
Personnel
The average number of employees during the first quarter amounted to 2 335 compared with
2 351 during the first quarter of 2001. The average number of employees thus decreased by
16 people.
4
Product areas
Net turnover and operating profit
MSEK
Kraft paper
Containerboard
Market pulp
Other and eliminations
Total Group
Q1
2002
875
543
338
1 756
Net turnover
Q4
%
Q1
%
2001 change 2001 change
834
5
972
-10
541
0
481
13
362
-7
387
-13
-2
1 735
1 1 840
-5
Operating profit
Q4
%
Q1
%
Q1
2002 2001 change 2001 change
17 231
-22
180 154
-22 107
-10
96 123
20
-25 141
-89
15
-32
-10
-34
1 469
-43
268 265
Kraft paper
First quarter
The operating profit for the period was MSEK 180. Compared with the final quarter of 2001
the profit climbed by MSEK 26 or 17%, mainly due to a 6% increase in deliveries. Prices fell
slightly. Compared with the same period last year the operating profit was down by MSEK 51
or 22% due to both lower prices and lower volumes. The reduction in volumes is in line with
Billerud’s strategy described below under “Containerboard”.
Containerboard
First quarter
The operating profit for the period was MSEK 96, a fall of MSEK 27 or 22% compared with
the final quarter of 2001. The fall was due to lower prices which were only partly
compensated for by volume increases. Compared with the previous year the operating profit
was down by MSEK 11 or 10% despite significantly higher volumes. The effect on profits of
volume increases, however, has been less than the effect of lower prices. Volume increases
are in line with Billerud’s strategy of increasing sales of white liner, which will also lead to
reduced production and deliveries of unbleached kraft paper.
Market pulp
First quarter
The operating profit reached MSEK 15, a fall of MSEK 5 compared with the final quarter of
2001. Prices decreased marginally and costs were relatively unchanged between the
quarters. Compared with the previous year the operating profit was down by MSEK 126 or
89%, primarily due to lower prices.
Parent company
Billerud AB comprises the Gruvön mill, the sales organisation for the Nordic markets and
markets outside Europe, and head office functions.
Net turnover in the first quarter of 2002 amounted to MSEK 838. Profit after financial items
amounted to MSEK 117. Fixed-asset investments, excluding shares, amounted to MSEK 32.
The average number of employees was 1 100. Liquid assets and short-term investments
amounted to MSEK 143.
5
Annual General Meeting, share dividend, etc.
Billerud AB’s Annual General Meeting will be held at 4 p.m. on 7 May 2002 in Aula Magna at
Stockholms Universitet, Stockholm, Sweden. Notification of participation must be received by
the company by 30 April 2002 at the latest.
Billerud’s Board of Directors proposes a dividend of SEK 3.50 per share for 2001. The
record day for entitlement to the dividend will be Monday 13 May 2002. Payment via VPC
(the Swedish Securities Register Centre) is expected on Thursday 16 May.
Outlook
The market situation for packaging paper is currently relatively good. Billerud has noted an
improvement in orders in recent months. The pressure on prices that characterised the
market last year has ended. However, price levels are currently somewhat lower than the
average for the first quarter. Billerud is considering raising prices in certain markets and
segments, which will affect earnings in the latter part of the year.
Demand for market pulp has recently improved. Price levels for short-fibre market pulp were
raised on 1 April by around EUR 30 per tonne. Further increases have been announced from
1 May for long-fibre pulp.
The pace of production and delivery capability at Billerud’s paper mills are currently good.
The annual maintenance stoppage took place at Skärblacka in April. Maintenance
stoppages are planned at Karlsborg during the third quarter and at Gruvön in the final
quarter.
Stockholm, Sweden
22 April 2002
Billerud AB (publ)
Board of Directors
This interim report has not been reviewed by the Company’s auditors.
Interim reports in 2002
Second quarter
Third quarter
18 July
21 October
Billerud AB (publ) Box 703, SE-169 27 Solna Corporate Identity Number 556025-5001
Tel +46 8 553 335 00 Fax +46 8 553 335 80 E-mail: [email protected]
Internet website: http://www.billerud.com
Billerud manufactures and markets packaging paper in the form of kraft paper and containerboard, and
market pulp. Production is carried out at the Group’s integrated pulp and paper mills in Gruvön,
Karlsborg and Skärblacka. Billerud has a world-leading position within several well-defined product
segments. The main customer base is Europe but also includes the rest of the world. Billerud has
annual sales of approximately SEK 7 billion and around 2 400 employees
6
Appendix
Billerud Group
Accounting principles
The accounts are prepared in accordance with the recommendations of the Swedish
Financial Accounting Standards Council. The interim report is prepared in accordance with
recommendation RR20 of the Swedish Financial Accounting Standards Council. For details
of accounting principles and definitions of key figures, see the 2001 Annual Report pages 25
and 52-55.
Profit and Loss Account
MSEK
Net turnover
Other income
Operating income
Operating expenses
Depreciation
Operating expenses
Operating profit
Financial items
Profit after financial items
Tax
Net profit for the period
Earnings per share, SEK
3 months
Full year
Jan-Mar Jan-Dec
Jan-Mar
2001
2002
2001
1 840
1 756
6 910
5
1
10
1 845
1 757
6 920
-1 291
-1 398
-5 276
-85
-91
-345
-1 376
-1 489
-5 621
469
268
1 299
-28
-21
-118
441
247
1 181
-125
-70
-314
316
177
867
2.82
5.04
13.81
Balance Sheet
MSEK
Fixed assets
Stocks
Accounts receivable
Other current assets
Cash, bank balances and short-term
investments
Total assets
Shareholders’ equity
Interest-bearing provisions
Non-interest-bearing provisions
Interest-bearing liabilities
Accounts payable
Other, non-interest-bearing liabilities
Total shareholders’ equity, provisions
and liabilities
Specification of change in equity
MSEK
Opening equity
Net profit for the period
Closing equity
31 Mar
2002
4 324
664
1 217
114
412
31 Mar
2001
4 283
640
1 175
130
429
31 Dec
2001
4 355
708
1 118
115
347
6 731
6 657
6 643
3 268
77
508
2 000
331
547
2 542
99
431
2 732
321
532
3 091
77
509
2 001
412
553
6 731
6 657
6 643
31 Mar
2002
3 091
177
3 268
31 Mar
2001
2 224
318
2 542
Full year
2001
2 224
867
3 091
7
31 Mar
2002
358
-36
-196
126
31 Mar
2001
554
-213
-28
313
Full year
2001
1 633
-146
-170
1 317
Investment in fixed assets
Disposal of fixed assets
Change in long-term receivables
Cash flow from investment activities
Operating cash flow (= change in net debt)
-60
-60
66
-111
-111
202
-458
2
13
-443
874
Change in pension allocations
Change in interest-bearing debt
Cash flow from financing activities
Total cash flow (= change in liquid assets)
-1
-1
65
-3
-499
-502
-300
-26
-1 230
-1 256
-382
Liquid assets at the beginning of the year
Total cash flow
Liquid assets at the end of the period
347
65
412
729
-300
429
729
-382
347
Cash Flow Statement
MSEK
Operating surplus
Change in working capital, etc.
Net financial items, taxes, etc.
Cash flow from operating activities
1) Historical
data not available
31 Mar
2002
31 Mar
2001
Full year
2001
Margins
Gross margin, %
Operating margin, %
20
15
30
25
24
19
Return
Return on capital employed, %
Return on equity, %
23
25
Key figures
2)
2)
34
53
2)
3)
27
32
Capital structure
Capital employed, MSEK
Shareholders’ equity, MSEK
Interest-bearing net debt, MSEK
Net debt/equity ratio, times
Equity ratio, %
4 932
3 268
1 665
0.51
49
4 944
2 542
2 402
0.95
38
4 822
3 091
1 731
0.56
47
Earnings per share, SEK
Equity per share, SEK1)
2.82
52.08
5.04
40.51
13.81
49.30
Gross investments, MSEK
Average number of employees
60
2 335
111
2 351
458
2 379
1) Number
of shares: 62 740 998
12 months
3) Historical data not available. The calculation includes the result for the period, adjusted
proportionally as a full year value.
2) Rolling
8
Product areas
Quarterly breakdown of net turnover by product area and for the Group
MSEK
2002
I
Kraft paper
Containerboard
Market pulp
Other and eliminations
Total Group
875
543
338
1 756
Full
year
3 449
2 009
1 454
-2
6 910
IV
2001
III
II
I
834
541
362
-2
1 735
797
475
321
1 593
847
511
384
1 742
971
482
387
1 840
Quarterly breakdown of operating profit by product area and for the Group
MSEK
Kraft paper
Containerboard
Market pulp
Other and eliminations
Total Group
2002
I Full year
756
180
426
96
228
15
-111
-23
1 299
268
1)
2001
IV
III
154
192
123
87
20
19
-32
-52
265
246
II
179
109
48
-17
319
I
231
107
141
-10
469
1) Includes MSEK 47 in costs for building Billerud and the stock exchange listing. Costs totalled MSEK 15 in Q4,
MSEK 22 in Q3 and MSEK 10 for Q1 and Q2.
Quarterly breakdown of operating margin by product area and for the Group
%
2001
I
Kraft paper
Containerboard
Market pulp
21
18
4
Full
year
22
21
16
Group
15
19
IV
2001
III
II
I
18
23
6
24
18
6
21
21
12
24
22
36
15
15
18
25
Quarterly breakdown of deliveries by product area
000’ tonnes
Kraft paper
Containerboard
Market pulp
Total
2001
I
124
127
82
333
Full
year
463
449
310
1 222
IV
2001
III
II
I
117
120
87
324
107
106
78
291
109
115
81
305
130
108
64
302